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2004 DIGILAW 1240 (MAD)

Natarajan v. Marappa Gounder

2004-09-24

M.KARPAGAVINAYAGAM, M.THANIKACHALAM

body2004
Judgment :- M.Karpagavinayagam, J. The suit was filed by Marappa Gounder, the respondent herein on two promissory notes for a sum of Rs.6,000/- and Rs.20,000/- respectively. The suit was decreed in favour of the plaintiff. Hence, this First Appeal by Natarajan, the defendant. 2. The case of the respondent/plaintiff is as follows: The appellant/defendant borrowed a sum of Rs.6,000/- from the respondent/plaintiff and executed Ex.A-1 promissory note in favour of the plaintiff on 29.1.1979. Again on 1.3.1979, the defendant borrowed another sum of Rs.20,000/- from the plaintiff and executed Ex.A-2 promissory note in favour of the plaintiff. Repeated demands were made by the plaintiff for repayment. Since the defendant did not choose to pay the amount due under the abovesaid promissory notes, the suit has been filed by the plaintiff claiming the said amounts on the basis of the two promissory notes with interest. 3. The suit was contested by the defendant, the appellant herein with the following contentions: It is true that the defendant received Rs.6,000/- and executed Ex.A-1 promissory note. The defendant has subsequently paid the entire amount of Rs.6,000/- to the plaintiff. In spite of several demands, though the plaintiff promised to return the suit promissory note, he has not done so. He never received Rs.20,000/- nor he executed any promissory note. Ex.A-2 promissory note is a rank forgery, fabricated by the plaintiff for the purpose of harassing the defendant. So, the claim for the amounts on the basis of the two promissory notes would fail and consequently, the suit has to be dismissed. 4. The trial Court, on framing appropriate issues, allowed the parties to adduce their evidence. The plaintiff examined himself as P.W.1 and marked Exs.A-1 and A-2. The defendant examined himself as D.W.1; no document was marked on his side. Since the thumb impression found on Ex.A-2 promissory note was disputed, a report was called for from the finger print expert, who was examined as P.W.2 and the said report is Ex.C-1. 5. The trial Court, on evaluating the materials available on record, rejected the case of the defendant and decreed the suit in favour of the plaintiff. Aggrieved by the same, this First Appeal has been filed. 6. 5. The trial Court, on evaluating the materials available on record, rejected the case of the defendant and decreed the suit in favour of the plaintiff. Aggrieved by the same, this First Appeal has been filed. 6. The main contention urged by learned counsel for the appellant/defendant is that the respondent/plaintiff has failed to prove the proper execution of Ex.A-2 promissory note and without considering the same, the trial Court has committed a grave illegality by drawing presumption under Section 118 of the Negotiable Instruments Act and decreed the suit in favour of the plaintiff. It is also submitted that the trial Court has not considered the evidence adduced by the parties in proper perspective and therefore, the appeal has to be allowed. 7. In reply, learned counsel for the respondent/plaintiff justified the reasonings in the judgment rendered by the trial Court. 8. The points for determination in this appeal are as to: (i) Whether the trial Court is correct in holding in favour of the plaintiff in the absence of the evidence to the effect that Ex.A-2 promissory note was supported by consideration. (ii) Whether the presumption under Section 118 of the Negotiable Instruments Act could be drawn in favour of the plaintiff in the facts and circumstances. (iii) Whether the burden of proof could be shifted on the defendant in the absence of proof for the proper execution of Ex.A-2 promissory note. 9. We have heard the learned counsel for the parties and considered their submissions and perused the records. 10. According to the plaintiff, the respondent herein, as seen from his plaint, the appellant/defendant borrowed a sum of Rs.6,000/- on 29.1.1979 and executed Ex.A-1 promissory note and again on 1.3.1979, he borrowed another sum of Rs.20,000/- and executed Ex.A-2 promissory note. In consonance with the contents in the plaint, the plaintiff as P.W.1 would state that the two promissory notes, namely Exs.A-1 and A-2 have been executed by the defendant on receipt of consideration. 11. In consonance with the contents in the plaint, the plaintiff as P.W.1 would state that the two promissory notes, namely Exs.A-1 and A-2 have been executed by the defendant on receipt of consideration. 11. It is the specific case of the defendant through the written statement that though he executed Ex.A-1 promissory note on receipt of the amount of Rs.6,000/- as a loan, he paid back the amount and in spite of his request for return of the promissory note, the plaintiff did not handover the same and that Ex.A-2 promissory note has never been executed by him and as such, it is a rank forgery, fabricated by the plaintiff. 12. In the light of the stand taken by the defendant with reference to Ex.A-2, the trial Court directed the finger print expert to compare the thumb impression found in Ex.A-2 with the admitted thumb impression of the defendant. In pursuance of the said direction, P.W.2 finger print expert compared the thumb impression and gave his opinion through Ex.C-1 report that the impressions in both the documents were made by one and the same person. 13. Thereupon, the defendant filed an additional written statement by making a change in his defence, contending that when the defendant borrowed a sum of Rs.6,000/- and executed Ex.A-1 promissory note, the plaintiff obtained his thumb impression in another stamped blank promissory note form. On the basis of the additional written statement, the evidence was adduced by the defendant as D.W.1, whereunder he would state that when Ex.A-1 was prepared, the plaintiff has obtained his signature in the blank form and as such, the same has been misused by the plaintiff to make a false claim with reference to Rs.20,000/-. Thus, it is clear that the defendant has taken two different stands. 14. At this stage, it is worthwhile to mention that the plaint was filed on 28.1.1982. The first written statement was filed on 14.6.1982. As indicated above, in order to find out as to whether the thumb impression found on Ex.A-2 was made by the defendant, the trial Court directed P.W.2, the finger print expert to compare the thumb impression and send his report. The report was prepared on 2.2.1985 and the same was sent to Court immediately. As indicated above, in order to find out as to whether the thumb impression found on Ex.A-2 was made by the defendant, the trial Court directed P.W.2, the finger print expert to compare the thumb impression and send his report. The report was prepared on 2.2.1985 and the same was sent to Court immediately. On coming to know of the result of the report of finger print expert, the defendant chose to file the additional written statement on 14.12.1988, taking a different stand as stated above. 15. Further, it is seen from the oral evidence adduced by D.W.1, the defendant as seen from his deposition dated 17.8.1989 in his chief examination that the thumb impression found on Ex.A-2 was not put by him. He also went to the extent of deposing that the opinion of the finger print expert is not correct. But nothing was elicited from P.W.2 finger print expert to indicate that the comparison was not properly made and as such, the opinion is wrong. Further, in the later portion of cross-examination, the defendant admitted that the thumb impression found on Ex.A-2 was made by him only. 16. Thus, it is obvious that the stand taken by the defendant is not consistent. But one thing is clear. The plaintiff has proved through his oral evidence and documentary evidence, Exs.A-1 and A-2 promissory notes and Ex.C-1 finger print expert's report, that the defendant has received a sum of Rs.6,000/- on 29.1.1979 and executed Ex.A-1 and again on 1.3.1979, he executed another promissory note, namely Ex.A-2 in favour of the plaintiff on receipt of Rs.20,000/-. When once this is proved, the evidential burden shifts on the defendant to establish that no consideration was passed on to him and that the thumb impression found on Ex.A-2 was not put by him or the said thumb impression was obtained from him in a blank promissory note form. 17. In such a fact situation, the Court has to invoke Section 118 of the Negotiable Instruments Act, which deals with the presumption as to negotiable instruments of consideration. The said Section 118 provides thus: "Until the contrary is proved, the following presumptions shall be made:-- (a) of consideration - that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has been accepted, endorsed, negotiated or transferred, was accepted, endorsed, negotiated or transferred for consideration; (b) ... ....... The said Section 118 provides thus: "Until the contrary is proved, the following presumptions shall be made:-- (a) of consideration - that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has been accepted, endorsed, negotiated or transferred, was accepted, endorsed, negotiated or transferred for consideration; (b) ... ....... " 18. Section 118 of the Negotiable Instruments Act lays down a special rule of evidence applicable to negotiable instruments. The presumption is one of law and thereunder, a Court shall presume that the negotiable instrument or the endorsement was made or endorsed for consideration. In effect, it throws the burden of proof of failure of consideration on the maker of the Note, or the endorser, as the case may be. 19. The phrase "burden of proof" has two meanings. One, the burden of proof as a matter of law and pleading and the other, the burden of establishing a case; the former is fixed as a question of law on the basis of the pleadings and is unchanged during the entire trial, whereas, the latter is not constant, but shifts as soon as a party adduces sufficient evidence to raise a presumption in his favour. 20. It is true that in spite of the obligatory presumption under the said Section 118 of the Negotiable Instruments Act, the party concerned is required to adduce independent proof of passing of consideration. Where the thumb impression upon a blank paper are taken by the plaintiff, the burden lies upon the plaintiff to prove the execution of the promissory note by the defendant and thereafter, the onus shifts upon the defendant to prove that there is no consideration for such document. 21. In this case, the plaintiff has proved through his oral evidence as well as Exs.A-1 and A-2 and Ex.C-1 that the defendant received the payment and then executed the documents. Though initially, the case of the defendant was that he never put his thumb impression in Ex.A-2, he took a different stand after three years, that too, on receipt of report of the finger print expert, stating that in a blank paper, his thumb impression was obtained while Ex.A-1 was executed by him. However, this is not admitted by the plaintiff. 22. However, this is not admitted by the plaintiff. 22. On the strength of the decision of the Supreme Court reported in AIR 1961 SC 1316 (Kundan Lal vs. Custodian, Evacuee property), it is contended by learned counsel for the appellant/defendant that in the absence of the production of account books and when the relevant evidence is with-held by the plaintiff, Section 114 of the Indian Evidence Act enables the Courts to draw the presumption to the effect that if produced, the said account books would be unfavourable to the plaintiff. This presumption, if raised by the Court, can under certain circumstances, rebut the presumption of law raised under Section 118 of the Negotiable Instruments Act. 23. The observations of the Supreme Court in the said decision would not apply to the facts of the present case, because, in that case, the plaintiff, on behalf of a Company, maintained the accounts for the transaction, and when the plaintiff wilfully with-held the account books, it was held on facts that the presumption under Section 114 of the Indian Evidence Act in favour of the defendant would arise. 24. Further, the decision cited supra, namely AIR 1961 SC 1316 , has been considered in detail by the Supreme Court in the later decision reported in AIR 1999 SC 1008 (Bharat Barrel and Drum Manufacturing Co. vs. Amin Chand Payrelal). On a reading of the said judgment in AIR 1999 SC 1008 , the position of law as laid down by the Supreme Court by referring to various earlier decisions, would emerge as follows: When once the execution of promissory note is admitted, the presumption under Section 118(a) of the Negotiable Instruments Act would arise that it is supported by consideration. In other words, as soon as the execution of the promissory note is proved, the rule of presumption laid down in Section 118 of the Negotiable Instruments Act helps the plaintiff to establish the shift the burden on the defendant. Such a presumption is rebuttable. The defendant may adduce direct or circumstantial evidence to prove that the promissory note was not supported by consideration. Such a presumption is rebuttable. The defendant may adduce direct or circumstantial evidence to prove that the promissory note was not supported by consideration. If the defendant is proved to have discharged the initial onus of proof showing that the existence of consideration was improbable, then only the onus would shift on the plaintiff, who will be obliged to prove it as a matter of fact and upon failure to prove the same, would dis-entitle him for the grant of relief. If the defendant fails to discharge the initial onus of proof by showing the non-existence of consideration, the plaintiff would invariably be held to be entitled to the benefit of "presumption" arising under Section 118(a) of the Negotiable Instruments Act. 25. In the light of the above principles, if we look at the facts of this case, it cannot be said that the presumption would arise under Section 114 of the Indian Evidence Act in favour of the defendant. 26. In the case on hand, the defendant obtained a loan from the plaintiff for the purpose of family expenses and for purchasing a property. The plaintiff specifically stated in his cross-examination that he was not doing any money lending business and was merely an agriculturist. 27. Admittedly, the plaintiff is not a 'Company' and the non-production of account books relating to payment of money, would not amount to wilful with-holding of the account books. In other words, the mere fact that the plaintiff did not adduce evidence by producing the account books to prove the passing of consideration, would not in any way relieve the defendant from the burden of establishing the contrary of the presumption arising under Section 118 of the Negotiable Instruments Act. 28. As a matter of fact, the defendant himself admitted the first payment in regard to Ex.A-1 promissory note and strangely, he has taken two different stands with reference to Ex.A-2 promissory note, which would also in a way strengthen the case of the plaintiff. 29. 28. As a matter of fact, the defendant himself admitted the first payment in regard to Ex.A-1 promissory note and strangely, he has taken two different stands with reference to Ex.A-2 promissory note, which would also in a way strengthen the case of the plaintiff. 29. From the foregoing, it is seen that when the materials are available through P.W.1, the plaintiff's evidence, P.W.2, the finger print expert's evidence, Exs.A-1 and A-2 promissory notes and Ex.C-1, the report of the finger print expert, there is no reason to reject those materials in the absence of any effort taken by the defendant to establish that the amount towards Ex.A-1 promissory note has been repaid and there was no consideration passed on with reference to Ex.A-2 promissory note. 30. For the reasons stated above, we are not able to find any infirmity with reference to the appreciation of the materials available on record, by the trial Court. The findings and the reasonings given by the trial Court cannot be said to be wrong. As such, the appeal has no merit and the same is dismissed. No costs.